Post by Jon Goldstone, Managing Partner (UK & Global)

Marmite has been in the news again. I saw a mixture of excitement and repulsion responding to the news that Marks & Spencer have launched Marmite flavoured Hot Cross Buns. An equally split opinion met the announcement that a Marmite Cornetto will be available this summer.

For those outside of the UK, Marmite is a yeast extract spread that Brits have been spreading on toast since 1902. It is famous for its ‘Love It, Hate It’ positioning, which helps to explain the rather polarised response to these latest innovations.

What interests me the most is Marmite’s continued use of brand partnerships and licensing deals to keep the brand top of mind. It surprises me that so few brands use licensing as a brand building tactic.

The benefits are significant:

  1. Extended reach and awareness – your brand is now accessible to a much broader audience, driving penetration with those that buy the partner brand and the new category. For example, Cornetto consumers are much younger that the core Marmite consumer and Mark and Spencer’s food shoppers are older and more affluent.   
  2. Incremental revenue – well negotiated licensing dals where there is a true win-win for both parties can be lucrative. A typical deal will involve a licensing fee of c.5% of net revenue, but this can extend to c.15% for really powerful brands. That £50,000 for every £1million of sales is pure cash and a helpful contributor for any brand.
  3. Brand equity boost – if you pick your partners carefully, the buzz surrounding innovative partnerships can be a very cost-effective way to enhance brand equity. The mixed response to the Marmite Cornetto and Hot Cross Buns does a fantastic job of reminding people that Marmite is a brand that you either love or hate.

So why don’t more brands do it? I think it’s mainly because brand partnerships via licensing deals are perceived as complex and time-consuming, a lot of work for a relatively small return. But that doesn’t have to be the case. The following tips should help:

1. Use specialists – Unilever are fantastic at this. Their team of licensing specialists are world-class. The secret is to use a team, internal or external, who are continually negotiating partnership agreements. It is so much easier to navigate around the various commercial and legal issues if this is your day job, it’s not a Friday afternoon job for an already busy Brand Manager.

2. Start with your own portfolio – Unilever have been doing a lot of this recently. Recent internal collaborations between Marmite and fellow Unilever brands like Lynx and Cornetto are inevitably easier to manage than external partnerships.

3. Be selective – it is very easy to be opportunistic and say yes to every brand that knocks on your door, after all who doesn’t like free money? The secret of course is to only work with the brands where there is a true give and get.

4. Commit to multiple initiatives – Marmite’s licensing deals (see below) are such a success because each one feels like it’s a chapter in an evolving brand story, fans of the brand anticipate and celebrate each new partnership.

5. Amplify like mad – I feel like consumer brands are just starting to do social media well (it’s only taken 15 years!) and brand collaborations are social media fuel. Marmite gets this and does an amazing job of amplifying each launch across multiple social channels.

Whilst we wait for the next ‘Do you love it or hate it?’ brand partnership from Marmite, maybe it’s time to start thinking about how your brand can benefit.